PeakOil: whom do you believe? ChevronTexaco or ExxonMobil?
May 4th, 2006Posted by: admin
[Note: read the byline! I haven't posted on Prometheus in a while, and sometimes when I do Roger gets all the hate mail that should be sent to me.]
Although it’s a favorite subject of mine, I haven’t written about Peak Oil in a while. Last time I did it was to note Chevron’s public education campaign to tell everybody about the Peak. Of course, Chevron isn’t coming right out and saying “The Peak is here!” but if you know enough about the subject it’s pretty easy to read between the lines.
Not surprisingly, Big Oil isn’t too sure where to take the Peak Oil question, and that uncertainty might mirror the uncertainty in Peak Oil science. (Sound like any other issues we talk about around here?) Even though it seems clear from the quotes Matt Savinar posts that most involved closely in oil see the peak coming (link and link for example, and for what its worth a few people I have talked in oil have told me they all know it’s coming soon, too…this includes an American who lived in Saudi Arabia for many years), Big Oil is trying to figure out how to frame the issue to a public more concerned about $3.159/10 gas than anything else.
Much like the climate change debate, on Peak Oil you have two sides with staunchly staked-out positions. Each side includes their own petroleum geologists, resource economists, energy investment bankers and multinational oil companies. Of course it is the latter we’ll listen to most closely, since they ostensibly are in the best position to know about a peak and perhaps to drive policy toward or away from it.
So what are the majors saying and doing about Peak Oil? Chevron is clearly embracing the tactic of warning the public so that when the public eventually sees the light, Chevron can say, “Hey, we’ve been telling you about this for a while!”
But not so ExxonMobil. XOM is taking exactly the opposite tactic: “With abundant oil resources still available … peak production is nowhere in sight.”
This difference in opinion has interesting parallels to how these two companies have approached other environmental issues over the past few years. Chevron has been running ad campaigns touting their environmental stewardship while Exxon has been pouring money into muddying the climate change science waters. Further, many assume that XOM is well-aware of climate change risk, but has their own internal logic and reasons to muddy the debate. If so, it parallels their attitudes on Peak Oil, for while they are running NY Times op-ed ads saying “peak production is nowhere in sight,” they apparently don’t really believe that themselves.
Thankfully, although positions are staked out on Peak Oil, there does not seem to be a Left/Right, Republican/Democrat slant on the positions, which may make political action easier if/when this issue’s time has come. And that might be the best indication that this isn’t a clear “winners and losers” issue. If the Peakists are right, we’re all losers.
May 4th, 2006 at 11:10 am
Kevin
I’m not so sure about your assertion that there is no strong political divergence in the peak oil hullabaloo.
It seems to me that the *key* disagreement is not so much about peak oil science, i.e. estimating the proximity of the envisaged downturn. Instead, at the heart of the controversy lies a political dispute about whether or not this alleged problem should be taken care of by powerful governments or by the conventional dynamics of the free market.
As I see it, the peak oil controversy shares with the environmental debates the deep-seated conflict between both left- and right-leaning advocates of strong governments and command-and-control policies on the one hand and free-market liberals who believe that the markets will, predictably, provide the best solutions to the energy needs of the future.
For those interested to read up on this debate, I recommend Mark Jacard’s book “Sustainable Fossil Fuels,” one of the best-researched and most convincing studies on the peak oil issue.
http://www.cambridge.org/uk/catalogue/catalogue.asp?isbn=0521861799
For a book review, see
http://observer.guardian.co.uk/business/story/0,,1702261,00.html
May 4th, 2006 at 11:49 am
Thanks Benny – you might be right, but the US hasn’t even gotten that far yet. Before the decision-makers get into a markets vs. gov control fight they have to acknowledge the problem first, which for the most part they haven’t yet done. The few that have — those that are sounding an alarm — haven’t painted it as a partisan issue or as a market/control issue. And for what it’s worth, I haven’t heard much clamoring for gov control solutions from those that are trying to sound an alarm here. Eventually, though, you’re probably right.
May 4th, 2006 at 11:59 am
By the way, I like this quote from the end of that Observer article:
“Ironically, the most poignant concern comes from Jaccard himself. ‘Clean and low-cost energy would free people to live and travel where they want, and consume as much as they want, which could intensify the pressure on valued ecosystems and the depletion of other non-renewable resources,’ he writes. ‘A sustainable fossil fuel future does not guarantee a sustainable human presence on this shrinking planet.’ ”
Jevons’ Paradox. Something that Charlie Hall at Syracuse talks about often….
May 4th, 2006 at 12:41 pm
Hey Kevin,
Did you see the article in the April 22 Economist called “Steady as she goes: Why the world is not about to run out of oil?” It questions that Peak Oil is imminent and suggests that technological innovation will create access to more difficult sources and also extend the useful life of the existing easy sources. They quote Exxon Mobil’s “decades to come” position.
May 4th, 2006 at 12:55 pm
I have a family member who has spent years negotiating government contracts with the oil companies. He said Exxon-Mobil is by far the best run, most disciplined oil company, with the smartest negotiators. Their only interest is in the long term return on investment.They will lie and cheat to get the best deal, but he actually prefers to deal with Exxon-Mobil over the others because they are rational and predicable.
All of this is to say that the only conclusion one can make from anything Exxon-Mobil says is that they believe their long term return on investment will be greater if the public is not concerned about peak oil.
Don’t know if one can draw any conclusion from Chevron
May 4th, 2006 at 12:58 pm
Kevin-
After talking to people in the know (e.g., geologists, people knowledgable about the oil industry), the only question is exactly when we hit peak oil. Some say we’ve already hit it, some say we’ll hit in 5-10 years. That’s the debate.
Another telling factoid: for those of us born in the 2nd half of the 20th century, 80% of the world’s cheap fossil fuels will be burned during our lifetimes. Amazing.
So what to do about it? Obviously, we need to develop alternative sources of energy. For several reasons, I think there’s a central role to be played by gov’t funded R&D. In addition, we need to unleash the power of the private sector by putting a price on C emissions. That will truly incentivize the market to provide C-free energy.
Regards.
May 4th, 2006 at 2:11 pm
Andrew, here’s something i’m chewing on:
Even in a free-market system, carbon taxes can be justified in terms of climate change along the lines of “people should have to pay to use a common resource and in this case polluting the atmosphere with CO2 is the use of a common resource.”
But you can’t use the same justification on Peak Oil or alternative source development since people are already paying for the resource that’s being extracted and used. So if we institute carbon taxes for the purpose of either resource conservation or stoking the developement of alternatives, we’re stuck with justifying the taxes on the basis of behavoir modification.
Is this really a good strategy? It’s the same thing as sin taxes — trying to get people to smoke less by raising the price of cigarettes sounds like getting people to drive less by raising gas taxes. Climate change is one thing and carries its own justifications, but it’s hard to argue that using energy is “sinful” and thus should be slowed through taxation just because we might be running out of some types of it.
May 4th, 2006 at 2:31 pm
Kevin-
I agree with your analysis, and whether one thinks this is a good idea or not is clearly a normative choice. Libertarians would likely not agree that behavior modification is good goal of gov’t policy, but my judgment (as a citizen) is that the AGW/end of oil problem is so important that the gov’t does indeed need to step in to encourage private actors to make socially preferred choices.
Regards.
May 4th, 2006 at 4:09 pm
AD – But the reasons for modifying behavior between the two are VERY different. I support cap and trade for CO2 emissions because AGW is a tragedy of the commons situation and the commons (the atmosphere) can’t be carved up into private property. I don’t see how a C-tax is going to help for peak oil specifically, since the problem with peak oil is that energy prices will climb; I don’t see how raising energy prices premptively will help. The same infrastructure changes will need to be made – the C-tax would just force them to be made earlier when the technologies are less mature.
May 4th, 2006 at 9:03 pm
MXIV-
if all we were trying to do was generate incentive for renewables, I would probably agree that a C-tax is not effective. but combined with the AGW problem and the economic/security risk arising from the fact that we import so much foreign oil from despitic and unsavory countries, I think it makes sense to increase the price *now* rather than wait for the market to raise the price.
Regards
May 5th, 2006 at 7:57 am
Andrew-
The history of government enforced pricing, whether higher or lower than market value, is not a very successful one. It can only be accomplished on items like cigarettes and alchohol, because society recognizes the negative impacts these items have and accepts the ’sin’ tax.
Energy, on the other hand, is a vital commodity that is required by every citizen for the health and well-being of all they care about. We accept a tax on gasoline, because we understand that the tax money goes to build and maintain our roads, which we also require. But to artifically raise this price to ward off something as unsubstantiated as a futuristic climate crisis is another matter entirely. I just don’t think the population will stand for it, and the grumbling in Europe over the struggle to reach the modest Kyoto targets is ample evidence of that.
Then, of course, there is the obvious deduction that if we have reached peak oil, our CO2 emissions will decrease in the coming years and not increase at 1%/year as the IPCC models assume. This, of course, reduces the threat of an AGW crisis, making it all a mute point anyway.
May 5th, 2006 at 8:12 am
Jim Clarke says “Then, of course, there is the obvious deduction that if we have reached peak oil, our CO2 emissions will decrease in the coming years and not increase at 1%/year as the IPCC models assume.”
That is not correct as coal is the largest, and as time goes on the more and more dominant fossil fuel CO2 producer. Coal is also a worse CO2 creater per unit of power than petroleum. There could be the opposite effect – if we do pass “Peak oil” then we may start to use more coal, doing things like moving to rechargeable hybrid cars – recharged on the massive conventional coal energy plants we seem to be building in the U.S. (See current issue of Natural History Magazine). Thus less oil use could actually increase CO2 emissions.
Well assuming nothing else changed which would be improbable… Things like combined cycle coal to gas, coal to gasoline, etc. Things that would be encouraged by a CO2 tax I think.
May 5th, 2006 at 11:31 am
Two things:
1. Check out this week’s Economist for a profile of Rex Tillerson, ExxonMobil’s new CEO. Tillerson says that Exxon is NOT betting on prices staying high and that the current spike is just part of the continuing boom-bust cycle in the oil industry.
http://www.economist.com/business/displayStory.cfm?story_id=6850162
2. Kevin and others mention that raising taxes b/c of an impending peak in oil production is a form of behavior modification that is hard to justify as part of a free-market system or under libertarian ethics. See the links below for a paper and discussion on modelling Peak Oil. The most interesting result is that an energy tax enacted right now delays the peak but an anticipated energy tax that comes online 5 or so years in the future accelerates the peak. Basically, with the anticipation that oil will be more costly to consumers and less profitable for producers in the future, we use more now.
http://www.uncg.edu/bae/people/holland/research/Holland_Peak_Oil.pdf
http://www.env-econ.net/2006/05/economic_modeli.html
May 5th, 2006 at 4:47 pm
wrt to Tillerson, this is a comment from Petroleum News:
On May 1 Petroleum News discussed these topics with Alaska oil industry consultant Roger Herrera.
“I really have to believe that the world is very close to, if not past, peak oil,” Herrera said.
Coming from a background as an oil geologist in the days when there might be a one in 20 chance of striking oil with a wildcat well, Herrera was trained to be an optimist about finding oil. So, anticipating declining production really goes against the grain with him.
http://www.petroleumnews.com/pntruncate/769687358.shtml
(from odograph @EnvEcon Blog)
Best,
D
May 6th, 2006 at 7:28 am
Markk -
I agree that we could start using more coal, but that is not the only solution to our energy needs. As oil becomes more expensive due to declining supply, ‘cleaner’ sources of energy become more competitive. The IPCC projections for increasing CO2 are too high already, and will likely continue to diverge from reality with each passing decade.
My main point concerned a minority of the worlds population that feels it has the right to control what kind of energy individuals use and how much they should pay for it. Since energy is key to an individuals survival, regulations that threaten an individuals ability to maintain a healthy lifestyle will not be taken lightly, especially when the rational for the tax is a futuristic, hypothetical crisis.
May 6th, 2006 at 1:44 pm
Ah cleaner sources will develop due to the magic of the marketplace. Just in time too. Come here fellow, I need my wand.
May 6th, 2006 at 7:01 pm
Jim Clarke-
I guess we have a difference of opinion about the power of the free market to solve problems like peak oil/AGW. Recent history shows me that the best interests of companies like Exxon are not particularly aligned with the best interests of our society. Over the next few decades, Exxon’s interests are best served by high oil prices and no alternatives to oil.
Much like the war on terrorism or national defense, there are some things that we just do not leave to the market.
Regards.
May 6th, 2006 at 7:31 pm
That’s a couple of times now so I’d like to ask Jim Clarke whether he’d paint a picture for me of the “healthy lifestyle” that is dependent upon people burning as much fossil fuel as they can get their hands on; I’d be obliged. If it’s not just fossil fuels that are key to good health, but energy use more generally – and apparently we’re not talking of using our own energy for walking or riding a bike here, for some reason – then am I missing something about the way in which the unfettered free market will be delivering us our all-you-can-eat energy supply with other than fossil fuels, real soon now?
May 6th, 2006 at 10:26 pm
Gentlemen,
I do not profess to know specific aspects of the future and question those who seem to think that they do. That is why I am a AGW crisis skeptic.
That said, I do recognize certain patterns that show a remarkable consistancy. One of those patterns is the advance of technology. What would really be strange is if there was no innovation in the coming decades. There is absolutely no evidence that such a thing could occur. In fact, since there seems to be a connection between communication and innovation, it is reasonable to assume that the rate of innovation will increase.
So who is more realistic? Those of you who deny the history of human innovation and claim that such hopes are ‘magic wands’, or me, simply looking at the real world and expecting advancement to continue.
If I knew specifically how this innovation was going to come about, I would be wealthier than Bill Gates!
Now, I do not want to argue the benefits of free markets over human controlled markets. The evidence that free markets are overwhelmingly more beneficial than controlled markets is, well, overwhelming. Governments have a role in insuring that the rule of law is followed in such markets, but tend to really muck it up when they try to control them.
The idea that Exxon, or any company for that matter, can work against their customers wishes and stay in business, is silly. Only governments can do that because they have armies. Even then, it eventually results in the downfall of that government. Exxon does not set the price for oil, nor can they charge what ever they want for a gallon of gas. Saying that they want to have bigger profits is irrelevant. All companies want to have bigger profits, but a truly free market determines prices, not companies.
Profits are determined by how well the company serves society. That is why it is counter-productive for governments to punish profitable companies (that are abiding by the rules), for such punishment results in a reduction of services to society.
John -
You wrote: “…I’d like to ask Jim Clarke whether he’d paint a picture for me of the “healthy lifestyle” that is dependent upon people burning as much fossil fuel as they can get their hands on…”
Well, I don’t accept the premise that anyone is burning as much fossil fuel as they can get their hands on. Saddam comes to mind, after the fall of Kuwait, but even he could have burned more.
Sometimes people burn fossil fuel to have fun, but most of it is burned to move goods and services in the most efficient way possible. It is burned to heat and cool our homes and work places. Our use of fossil fuels has been key to extending life expectancy into the 70s and 80s.
A forced reduction in the use of fossil fuels through taxation, regulation or both, will result in a reduction of the worlds standard of living, which doesn’t mean just a little inconvenience, but that people will die younger. Since the price would be artificially high, black markets will spring up and the rule of law will suffer.
Again, this is not a prediction. It is more of a recollection of what has happened when stuff like that has been tried.
If we have reached peak oil, we will deal with the decline. The free market, plus innovation, will be the most efficient way to do that because they always have been. On the other hand, predictions that resources will be running out soon have been around for decades and everyone of them has been wrong so far. Eventually, one may be right, but the track record does not engender a lot of confidence.
May 6th, 2006 at 10:56 pm
Jim Clarke-
You defense of free markets is stirring but unconvincing to anyone not already convinced. Consider this: there are all sorts of things that we don’t let the free market do. We do not let the free market handle security at airports. We do not let the free market determine the feds funds rate. We do not let the free market regulate drugs or the airwaves. We do not let the free market tackle the problem of terrorism. We do not let the free market determine who can buy cigarettes or alcohol.
These are areas where (for one reason or another) the markets have or will fail. Similarly, I believe that energy policy is an area where the gov’t should be playing a central role. The only question is what that role should be — bad policy is clearly worse than no policy, but I think good policy can truly enhance our transition to non-fossil fuels.
I would also take exception to your statement:
Profits are determined by how well the company serves society.
Are tobacco companies serving society? What about the makers of handguns? What about fast-food restaurants, which promote obesity? Are all of these companies helping society. Perhaps you think so, but I would argue that they are not. And I would put oil companies in the same league with these other companies.
Regards.
May 7th, 2006 at 12:56 am
Aren’t the French healthier despite using less fossil fuel? It’s true of the Japanese anyway, and their life expectancy (if you must relate the two as Jim does), as well as that of the Canadians, Australians and Swedish – bloody socialists! – is higher too. Here’s a picture: http://en.wikipedia.org/wiki/Image:Life_expectancy_world_map.PNG
If you believe also, perhaps, that your use of modern pharmaceuticals is helping to cause your “health” – isn’t the drug business one of the most heavily regulated industries in history? Would we be even healthier (in your opinion, not mine) if that expensive and intrusive government regulation were removed from it?
But I can’t see any reason at all to believe that our health depends on our burning fossil fuels, frankly. What do you have against nuclear power, or would nuclear be alright if only the bothersome government regulations could be removed from it?
There’s not a single significant market operating in the western world today that is not regulated by government in more than one way, mostly for the greater good; am I missing one? And I’m not convinced that burning fossil fuels is really the secret of your “healthy lifestyle”, Jim: I reckon you’re holding out on me with the real skinny there.
May 7th, 2006 at 8:22 am
Gentlemen,
You appear to be arguing with me about things I did not say.
Andrew -
I did not say that there is no role for government in the market place. Governemnt is vital for maintaining the rule of law which makes free markets possible. There is also a role for government to regulate those products which have serious health impacts, like the food and water supply. Too much regulation, however, can have the opposite effect.
Take drugs, for example. The government’s attempt to keep ‘unsafe’ drugs off the market, causes delays in the release of beneficial drugs and makes them more expensive! How many have died for want of a drug or therapy that was still waiting for FDA approval, or died because they could not afford a new drug that had an inflated price due to regulations that were not necessary? Probably more than have died from ‘bad drugs’.
Even when some government regulation is appropriate, it must be balanced. The primary example of the abuse of regulation in the world today is DDT. There is little doubt that millions have died from the over-regulation of this chemical, which has never caused a single human death. This is the primary example, but far from the only one. There must be a balance in all regulations and that balance must be continually assessed, which is currently not done.
Since the burning of fossil fuels is not a health issue per se, there is little need for government regulation, other than in the transport of the fuel.
The preamble to the US Constitution outlines those areas where government is most effective. Several of the items you mentioned fall under those categories and are not generally associated with free markets, but even some of these items work hand in hand with the free market system, like airport security going to the company that can provide it the most effectively.
I did not say that all companies survive by serving society. They survive by serving their customers. Hence, some things you find offensive others find desirable. ‘Serving the customer’ is a real function that a company strives to accomplish. ‘Serving society’ is an ill-defined term that really rests in the eye of the observer. Viva la difference!
John -
While it is easy to count how many people die of ‘bad drugs’, it is very difficult to count how many have died from the lack of a drug, due to over regulation or high cost from said regulations. Since a company producing bad drugs will quickly be out of business, the number of deaths from such drugs will be minimal. However, the number of deaths due to over regulation and high cost can increase forever!
I would argue that some regulation is needed, but that we already have too much, and that the effect of the regulation is now doing more harm than good.
I am certainly not advocating ‘no regulation’ for drugs, just a continues attempt to find the best balance. (This applies to all regulations of anything.) Right now, the mindset is that a drug that causes 10 deaths a year should be banned from sale, even if it saves 10,000 lives in that same year! That is not effective regulation.
As to fossil fuels – I am certainly not opposed to using other sources of energy, and many countries who already do enjoy life expectancies as great or greater than the United States. That doesn’t change the fact that fossil fuel use over the last 100 years brought us to this point, or that these countries are still dependant on fossil fuels to move the goods and services that keep their citizens happy and healthy.
My argument is that it would be a mistake to artificially inflate the price or restrict the use of fossil fuels for the sake of a hypothetical crisis that may or may not happen 50 to 100 years from now. In 50 years, technology will make this a mute point; again, not because I can predict the future, but because I can see what has happened in the past.
If you do not think that fossil fuels are vital for a healthy lifestyle, I challenge you and your family to go one week without the benefit of fossil fuels or anything that is derived from them. No, wait! Your family is innocent here, and I do not want them to suffer for your thoughts. You can try it by yourself. Good Luck! You are going to need it out there, naked in the woods, searching for roots and berries!
If you mean that it is ‘possible’ to have a healthy lifestyle without fossil fuels, then certainly it is possible, but not for society right now. Eventually it will happen, and it will happen more quickly and efficiently if the transition is left largely (not exclusively) to free market forces.
Why? Because it has always been thus!
The bottom line is that the decisions made daily by countless millions, acting in their own self interest under the rule of law, are much more efficient at finding the best use for limited resources than any individual or group could ever be, no matter how ‘well-meaning’ they are.
Please respond to what I write, not to what your own bias says I am implying; and I will try to write more clearly.
May 7th, 2006 at 5:46 pm
I just saw a report on NBC Dateline about ethanol. Apparently, the technology already exists to make the peak oil debate a mute point and dramatically reduce the threat (real or virtual) of an AGW crisis. Brazil is already an ethanol nation and does not import any oil from the leading oil producers. Innovation and free markets (with minimal encouragement from the government) will likely have the U.S. well on its way to a similar situation in 10 years or less; even faster than I thought!
Here is the link to the story on line:
http://news.sbs.com.au/dateline/index.php?page=transcript&dte=2006-03-15&headlineid=1085
May 7th, 2006 at 6:15 pm
I apologize, but the link above is not to NBC’s dateline, but to a similar story that appeared in Australia a few months ago. Here is the link to the NBC dateline story:
http://www.msnbc.msn.com/id/12676374/
Both tell the same story!
On a side note, I recognize that the Brazilan effort to develop ethanol was largely government driven. That doesn’t mean, however, that free markets could not or would not do the same thing.
Also, now that Brazil has shown it to be possible, nations with significant growing areas don’t need overriding government mandates to make this solution a reality. As more people learn about and desire ethanol, companies will provide it.
If big oil was smart, it would spend much of its new billions on ethanol production plants. If they don’t, someone else will!
May 7th, 2006 at 7:06 pm
Jim, it wasn’t left to the market to replace CFCs as refrigerants because the market wouldn’t have done something like that. Similarly, ’twere not ever thus that human behaviour were of such scale that it could have a global – not just local – impact on earth, the way our enormous emissions of GH gases do (at the “very likely” level of certainty) today. There is a price we pay, in negative effects on our own life-sustaining environment, for our tremendous economic and civilisational success over the past few hundred years. BTW Benny would bore me with child-frightening tales of Stalinist eco disasters at this point, I’m sure you won’t.
The market unaided will not address the issue of ACC because that’s not the market’s role. The market is not a sentient being with your best interests at heart, it’s just a market. For buying and selling stuff. What matters is whether you accept scientific evidence, how you weight the alternative policy options that your assessment of that evidence suggest to you, and how much you value complex things like the environmental future of the most beautiful and fruitful planet in the history of the universe …
May 7th, 2006 at 8:31 pm
“The market unaided will not address the issue of ACC because that’s not the market’s role.”
This assertion is not supported by history. The world has been “decarbonizing” for centuries…it’s ridiculous to expect that would *not* continue.
The world by the end of the 21st century will almost certainly be a “hydrogen economy”…regardless of what governments do.
http://phe.rockefeller.edu/future_business/
May 7th, 2006 at 9:12 pm
On the contrary, at the moment the world is super-carbonising. I know this because I know that atmospheric CO2 levels are rising monotonically year on year.
But I don’t even need to know that to know that your counterassertion is wrong, because you don’t actually refer in it to what I said (which was about the “market”, not “the world”).
May 7th, 2006 at 10:27 pm
Good discussion, guys.
MB – the world is decarbonizing? I assume you mean ‘carbon used per output of work’ or something like that. Well sure, the machinations of technological advance is working the ratio to our favor, but — as Jevons’ Paradox shows so well — that very decarbonization has led to a severe ramp up in total carbon burned. And as the output/carbon used ratio gets better and better, what happens? Suddenly carbon-burning technologies are well within the reach of “developing countries” with very large populations, which means even more carbon used in sum.
Also, on hydrogen: moving toward an “H2 economy” is fine but we better keep in mind that no amount of technology will ever change one basic fact: H2 is not a free molecule on the Earth’s surface. Which means we must expend energy to extract it before we can even get the energy back by burning it. Unlike oil and nuclear, which are gifts of solar energy/photosynthsis, geology, time and astrophysics, H2 is not a ready made fuel and it will always, no matter what we learn, be a net energy sink. Sure, we can radically ramp up nuclear in order to make H2 from H2O, but we’re always going to be paying a pretty high price for it.
May 8th, 2006 at 10:28 am
“MB – the world is decarbonizing? I assume you mean ‘carbon used per output of work’ or something like that.”
Yes, I guess I should have made that more clear. As Jesse Ausubel showed in other work:
“Wood is made of much cellulose and some lignin. Heated cellulose leaves charcoal, almost pure carbon. Lignin has a complex benzenic structure with an H:C ratio of about 0.5. Combining the pure carbon of cellulose and the 0.5 ratio of lignin, wood with 20% lignin effectively has an H:C ratio of 0.1. Said differently, wood weighs in heavily at ten effective Cs for each H. Coal approaches parity with one or two Cs per H, while oil improves to two H per C, and a molecule of natural gas (methane) is a carbon-trim CH4.”
http://phe.rockefeller.edu/BrainNotChange/
The world (i.e., the market) has “decarbonized” from wood to coal (10:1 to 2:1, C/H ratio), and coal to oil (2:1 to 1:2, C/H ratio), and oil to natural gas (1:2 to 1:4, C/H ratio)…all without any government mandates that the world decarbonize. It’s silly to think that this process will only continue with government mandates. As I noted before, by the end of this century, the world will be in a “hydrogen economy.” That means that CO2 emissions will be below levels that cause rising atmospheric CO2 concentrations…regardless of whether or not there are government mandates.
“And as the output/carbon used ratio gets better and better, what happens? Suddenly carbon-burning technologies are well within the reach of “developing countries” with very large populations, which means even more carbon used in sum.”
If you’re thinking that carbon used will continue to rise throughout the entire century, that thought is very strongly contradicted by available evidence. (If you’re thinking that carbon used will remain will rise by ~1 percent per year for the next couple of decades, before declining, then I agree.)
Here is a graph of CO2 emissions per capita in the world, from 1950 to the present. You can see it went up from 1950 to 1970, but since ~1970, it has been almost perfectly flat.
http://cdiac.ornl.gov/trends/emis/glo.htm
It’s *possible* that the curve will begin rising again, but it’s very unlikely. Technological history says that it will remain approximately flat for a while longer (my guess is 0-20 years), and then begin to *fall*…not rise.
Why won’t per-capita CO2 emissions continue to rise throughout the 21st century? Four potential reasons (in order of their penetration of the world energy scene, over time): 1) Energy efficiency, 2) methane hydrates, 3) photovoltaics, and 4) fusion.
“Also, on hydrogen: moving toward an “H2 economy” is fine but we better keep in mind that no amount of technology will ever change one basic fact: H2 is not a free molecule on the Earth’s surface.”
Yes, that’s absolutely true. But H2 can be easily made from water. And it can be used in fuel cells at very high conversion efficiencies, and producing only water.
“Sure, we can radically ramp up nuclear in order to make H2 from H2O, but we’re always going to be paying a pretty high price for it.”
You make two mistakes here. First, you use “nuclear” synonymously with “fission.” That completely ignores fusion, which is the much more logical long-range nuclear option. You also ignore photovoltaics. The world could easily get ALL its energy from photovoltaics. The only real barrier is cost (including the cost to store the electricity during the night…which is where the H2 comes into play).
As I’ve mentioned already to Roger Pielke Jr., if you folks at Prometheus really want to do a truly world-changing policy paper, y’all should calculate just what technological rewards would be appropriate for bringing fusion (most likely, non-tokamak fusion) to commercial fruition. The rewards which the U.S. government could offer to bring fusion to commercial fruition could be incredibly large (over $10 billion) as still EASILY be justified in terms of a ridiculously high return on investment.
May 8th, 2006 at 10:38 am
John Frankis writes, “On the contrary, at the moment the world is super-carbonising. I know this because I know that atmospheric CO2 levels are rising monotonically year on year.”
By “decarbonizing,” I meant that the ratio of carbon to hydrogen in the fuels being burned continues to go down. (And the ratio of carbon to hydrogen will approach zero by the end of this century, if not sooner.)
See my comments to Kevin Vranes, above.
“But I don’t even need to know that to know that your counterassertion is wrong, because you don’t actually refer in it to what I said (which was about the “market”, not “the world”).”
As I’ve noted, the world has switched from wood to coal (a significant reduction in carbon atoms per hydrogen atom), and coal to oil, and oil to natural gas…all without government mandates that such switches be done.
It’s silly to think that the U.S. and world economies won’t eventually be hydrogen economies, regardless of whether governments produce any mandates.
May 8th, 2006 at 11:34 am
All-
There’s no question that we have burned progressively lower carbon-intense fuels. However, there’s no guarantee that will continue: we will be out of natural gas in a few decades and countries like China and India have lots of coal, which they are certainly going to burn.
I think we all agree that we need alternatives, and that the world is heading in that direction already, albeit slowly. The the real question is: from a policy standpoint, how do we make sure that the transition to alternative energy occurs as quickly and efficiently as possible? My judgment of the answer: by deploying incentives beyond those which the free market can provide. In my opinion, something like a carbon tax will make the transition occur faster than just leaving it entirely to the free market.
Regards.
May 8th, 2006 at 7:22 pm
The world hasn’t really left coal for oil, it’s added oil into its energy budget – we’re burning more coal today than ever before (I’m fairly sure) and forecasts are for that to continue to grow for at least many decades to come. Granted that we’ll rapidly increase consumption of oil and gas as well … it’s easy to predict that atmospheric CO2 levels will continue their increase far into the future. For instance, despite the growth trend in world use of more hydrogenated fossil fuels, world CO2 emissions continue to rocket skyward in the upper graph you link to (which is the significant one for discussion of ACC, not the per capita emissions graph below it).
Of course the reason for preferring the more hydrogen rich fossil fuels has been their cost effectiveness as well as their better environmental performance, in particular that they leave more of our urban air breathable. It’s breathable today in the developed world thanks to government regulations. But unless other environmental externalities can be costed into the price of those fossil fuels they’ll remain less expensive than either nuclear or renewable powered hydrogen production for a very long time, leaving the hydrogen economy but a gleam in your eye. So Ausubel’s work is interesting and useful but history is not a roadmap to the future, only part of the grounds on which we must make our plans (if we’re to plan at all).
May 9th, 2006 at 10:42 am
“For instance, despite the growth trend in world use of more hydrogenated fossil fuels, world CO2 emissions continue to rocket skyward in the upper graph you link to (which is the significant one for discussion of ACC, not the per capita emissions graph below it).”
No, emissions are not continuing to “rocket skyward.” That’s merely an artifact of the fact that the first graph starts in the year 1750. (If the graph started at 1000 AD, it would REALLY look spectacular!
)
If you go to Figure 1 of my website:
http://markbahner.50g.com/what_will_happen_to_us.htm
…you’ll see that CO2 emissions were indeed “rocketing skyward” from 1950 to 1960 and from 1960 to 1970…with increases of more than 50% per decade in both those decades.
But the percentage increases have dropped off significantly (15 percent from 1980 to 1990, and 6 percent from 1990 to 2000). The increase for 2000 to 2010 will probably be in the neighborhood of 10 percent (i.e., 1 percent per year). At an increase of 1 percent per year, it will take ~70 years for CO2 emissions to double from their current value.
But in fact, it’s not likely that emissions of CO2 will *ever* double from their current level.
This will probably never happen in part because of the reasons that I’ve already mentioned:
1) energy efficiency (including development of hybrids and later fuel cells for transportation, and fuel cells for residential electricity and heating),
2) methane hydrates,
3) photovoltaics, and
4) fusion.
In fact, the most likely scenario is that emissions will peak at 20-50 percent above their current values sometime prior to 2050, and then will begin to decline.
“But unless other environmental externalities can be costed into the price of those fossil fuels they’ll remain less expensive than either nuclear or renewable powered hydrogen production for a very long time,…”
Please define, “very long time.”
The Department of Energy’s Energy Efficiency and Renewable Energy Laboratory projects that photovoltaics will be competitive with fossil fuel electricity circa 2015-2020:
http://www1.eere.energy.gov/ba/pdfs/39684_app_D.pdf
Further, *operating costs* for nuclear fission plants are already lower than for fossil-fueled plants (coal, gas, or oil). The place where coal, gas, and oil plants are less expensive than nuclear fission plants is the capital cost and disposal of waste.
And no controlled nuclear fusion process has even achieved break-even energy production (so essentially, the “cost” is infinite).
In summary:
1) Photovoltaics are projected to be competitive circa 2015-2020, and some tax on “externalities” of fossil fuels is unlikely to accelerate that schedule (unless, possibly, if ALL the revenue was dumped into photovoltaics development),
2) Nuclear fission is already compatible in operating cost, and reductions in capital cost (e.g. easier licensing) and the cost of waste are the main items of cost for nuclear fission,
3) Nuclear fusion is essentially “infinitely costly.” So fossil fuel taxes wouldn’t help there either (unless the money was dumped into development of fusion).
To me, it seems much better to offer technological prizes for development of fusion and photovoltaics (and make licensing and disposal of nuclear waste less costly), if the goal is truly to increase those technologies’ inputs to the energy mix.
May 9th, 2006 at 9:06 pm
The popular choice for scenario modelling is usually doubling of pre-industrial levels of CO2, rather than doubling of present day levels. As globally the burning of coal, oil and gas increases year on year at the moment, and as it’s very likely that we detect the hand of man significantly altering climate globally (with it being certain I think that we alter climate at the local and regional scales), modelling for a doubling of pre-industrial CO2 makes sense, a doubling of something from it’s long term baseline being a natural kind of forcing to consider.
I’d like to hope that PVs and other renewables might be cost competitive sooner rather than later so prizes offered for achievement of milestones with renewable energies and fusion would suit me fine, as would a carbon tax to pay for them, and an increase of funding of clean energy research generally. Renewables haven’t had the kind of military levels of spending tossed their way that nuclear enjoyed for decades, and it’d be nice to see peaceful, clean energies given support like that this millennium.